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Lincoln: payment limit rules would widen deficit

The new payment limit rules being proposed as amendments to the 2007 farm bill could mean more traditional U.S. crops being grown overseas and a wider U.S. agricultural trade deficit, Sen. Blanche Lincoln said.

Speaking on the Senate floor shortly after leaders agreed to a compromise on the number of amendments that could be offered to the bill, Sen. Lincoln, D-Ark., praised the Senate Agriculture Committee-passed farm bill, saying it would ensure a safe domestic food supply that too many senators and consumers seem to take for granted.

Lincoln accused some of her colleagues of, in effect, talking out of both sides of their mouths when they speak against farm programs and for tighter payment limits that she said would threaten the economic livelihoods of farmers in Arkansas.

“One day my colleagues are reporting about the dangers that our nation is facing with unsafe foods that are entering our country or the atrocities of outsourcing jobs,” she said. “And the next day they’re here on the floor criticizing farm programs that allow us to ensure that safe and affordable supply of food for our children and our families.”

Shortly after it resumed debate on Monday (Dec. 10) the Senate was expected to take up the Grassley-Dorgan payment limit amendment that would reduce the amount of payments larger farming operations can receive and an amendment from Sen. Amy Klobuchar, D-Minn., that would deny payments to individuals with incomes above $750,000 a year.

The Senate passed the amendment offered by Sens. Charles Grassley, R-Iowa, and Byron Dorgan, D-N.D., in its version of the 2002 farm bill, but the legislation was removed by House members of a House-Senate conference committee.

The Grassley-Dorgan amendment would eliminate the three-entity rule and set limits of $20,000 for direct payments, $30,000 for counter-cyclical payments and $75,000 for marketing loan gains and loan deficiency payments per individual.

Lincoln said those amendments threaten U.S. production of commodities such as rice and wheat and would encourage their production in foreign countries where they might not be grown in a safe and reliable way.

“If we’re not careful with the tighter payment limits that are being talked about and certainly the adjusted gross income limits, we’re going to make our producers of stable commodities like rice less competitive internationally,” she said. “And when we put them out of business, they’re not going to another area of our country.”

U.S. officials are predicting an agricultural trade deficit for the first time in the history of this country, she noted. “We need to stand up and say our agricultural sector is very, very important to us as well.”

National Cotton Council officials were urging the Senate to reject both amendments, saying reforms in the Senate Agriculture Committee-passed bill has made them unnecessary.

“These amendments, if adopted, would disproportionately impact diversified operations, make production financing even more difficult in times of sky-rocketing input costs and completely eliminate the value of the marketing loan as an orderly marketing and financial tool,” said NCC Chairman John Pecheu of Tranquillity, Calif.

“The unintended consequences will include cropping shifts which will cause excess production and lower prices and force landlords to shift to cash rent which will undermine the ability of you and limited resource farms to obtain financing.